I am a MA/MBA candidate at the Lauder Institute and the Wharton School of Business. I focus on Russian politics, economics, and demography but also write more generally about Eastern Europe. Please note that all opinions expressed here are mine and mine alone and that I do not speak in an official capacity for Lauder, Wharton, Forbes, or any other organization.
I do my best to inject hard numbers (and flashy Excel charts) into conversations and debates that are too frequently driven by anecdotes. In addition to Forbes I've written for True/Slant, INOSMI, Salon, the National Interest, The Moscow Times, Russia Magazine, the Washington Post, and Quartz.
I frequently make pronouncements of great importance on Twitter @MarkAdomanis. Compliments? Complaints? Job offers? Please feel free to e-mail me at RussiaHand@gmail.com

Indeed, a recent survey by HeadHunter, a Moscow-based Internet recruitment company, found that more than half of Russian employees with salaries of more than $6,600 a month—a solidly middle-class income—are afraid that their employers often read their emails, Google chats, Facebook posts, or personal notes on Twitter

I’ve seen other figures bandied about in other Western media stories which suggest that annual personal incomes of somewhere between $20,000 and $30,000 ought to qualify as “middle class.” I said at the time that Nemtsova’s story first came out that a salary of $6,000 per month was actually, by Russian standards, not “solidly middle class” but extremely well-off. However, I didn’t have much good data on income variation in Russia to back up my point, and I relied more on the fact that an income of $6,000 a month is arguably more than “middle class” in America a country which is obviously a lot wealthier than Russia.

Well, Rosstat just released some new data on poverty and inequality, and I thought it was worth taking a look to see what sort of an income actually qualifies as middle class in Russia. The following table, which I have adjusted to nominal US dollars instead of rubles, shows the average incomes of all Russians (i.e. including pensioners, children, and the disabled) from all sources (i.e. including pensions, and government transfers) from 2008 through 2011:

A quick glance shows that extreme poverty has decreased substantially, largely due to the fact that the value of pensions has more than doubled since 2008. But let’s take a closer look at the data to see what actually constitutes the “middle.” If we exclude the bottom three groups, the 29% of the population that makes less than $315 a month, and the top two groups, the 23% of the population that makes more than $845 a month, we capture almost half of the population. 47.8% of all Russians, if we’re being exact. This group is the actual middle class: comfortably above the poorest of the poor, but also comfortably below skilled professionals, not to mention the oligarchs. These people make, roughly speaking, anywhere from $4,000 to $10,000 per person per year year in nominal terms.

As Sean Guillory pointed out to me over Twitter, the nominal figures by themselves can be hard to interpret. Living costs in Russia are much lower than in the West, so smaller incomes can be stretched a bit more easily. Properly done Purchasing Power Parity (PPP) adjustments are very complicated, but if we judge by 2011 IMF figures than roughly speaking we should boost the nominal value of Russian wages by about 28% to capture their actual purchasing power.

Based on the data, then, a representative “middle class” household in Russia, two working parents and a child, could have an income of anywhere between $12,000 and $30,000 (or $15,600 and $39,000 adjusted for purchasing power) . I can easily see how the top end of that range qualifies as what Americans would understand as “middle class:” outside of Moscow, thirty or forty thousand dollars can go a pretty long way. But I don’t think I’m being uncharitable when I say that $12,000 for a household of three is not at all what Westerners have in mind when they speak about an “emerging middle class” that is going to challenge Putin’s political supremacy. $4,000 a year, even if you adjust that figure to capture Russia’s lower costs, is just not a lot of money, certainly not enough money for a new car, foreign vacations, flat screen televisions, Ikea furniture, extensive apartment renovations, or other things that are commonly associated with the consumerism of the emerging middle class.

Russia is clearly getting wealthier, and that’s all well and good. It is still, though, a very poor country: a significant chunk of its population experiences a kind of material deprivation that has, thankfully, been absent from advanced Western countries for a couple of generations. “Middle class” incomes, that is incomes that are broadly representative of Russians working decent jobs, are still extremely low by Western standards, and it will be a very long time before they are comparable.

If you judge by the numbers, if you look at how much Russians actually earn, the “emerging Russian middle class” of the Western media narrative (i.e. people who have smartphones, iPods, iPads, digital cameras, and all of the other accouterments of modern consumerism) is actually quite a bit wealthier than average. And that’s fine. It’s not exactly a shock, indeed it’s entirely unsurprising, that the best-educated, most productive, and wealthiest Russians are increasingly dissatisfied with the country’s brittle and unrepresentative political institutions. Upper class Russians are every bit as “real” and genuine as their less well-off brethren, and they ought to have every right to make their demands heard.

But “middle class” doesn’t have some sort of universal or transcendental meaning, it’s entirely dependent on a country’s particular circumstances and level of development. The actual Russian “middle class” is much better off than it was a few years ago, but is still in a pretty precarious financial position. Its standard of living is much, much lower than a Western “middle class” standard and will remain lower for the foreseeable future.

We ought to be very careful with our terms: calling the anti-Putin protesters in Moscow “middle class” wrongly suggests that they are economically representative of most Russians. They aren’t. There are many things we can call the political grouping which is increasingly self-confident and increasingly opposed to the current regime that more accurately describes its social and political position: “educated class,” “creative class,” “networked class,” “globalized class.” But we should remember that the actual Russian middle class is still quite poor, and that many of the things that we as Americans associate with membership in the middle class remain firmly out of its reach.

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An important issue is how do we define middle class. Do we do it by taking the national middle 50%; or do we take the middle 50% income levels of the developed world, and apply them to Russia, in which case its middle class will be just 10%-20% of the population?

Russia is not “a very poor country” by any reasonable definition. The World Bank puts Russia at #45 by purchasing power parity, in between Hungary and Poland and with Portugal at #39. I didn’t subscribe to this blog to read one novice error after another. Raise your game.

Oh, I don’t know. As you correctly pointed out, the living standard is affected and influenced by the buying power of your paycheck. As a recent report by the Federal Reserve Board reflects, the median net worth of American families dropped by almost 40% between 2007 and 2012. I know that’s hard to believe, which is why I’m including the link:

http://www.theamericanconservative.com/articles/revolt-of-the-rich/

“A study by the Bertelsmann Foundation concluded that in measures of economic equality, social mobility, and poverty prevention, the United States ranks 27th out of the 31 advanced industrial nations belonging to the Organization for Economic Cooperation and Development.”

Poverty is a subjective quality, hard to pin down in any kind of economic frame. I’m pretty sure it was you who pointed out that the median income of Russians and the median income of developed western nations was converging, not diverging. You’re certainly correct there, but once additional weighting factors such as the effect of poverty prevention efforts, social mobility and economic equality are applied, the picture looks considerably different and the rate of convergence might well be much more accelerated than you think. Your average factory worker in the USA (if there are any factories left in the USA) certainly still takes home a considerably bigger paycheck than his Russian counterpart. But how does it address his basic needs, and how does it compensate for his crumbling social safety net?

Economics is complicated, which is probably why I hate it. But this is all food for thought.

Thank you very much for the great article, Mr. Adomanis, but I can not agree that the “educated class” is a good name for the mentioned class of rich people. I’d rather call them “smart class”. Many people with Ph.D. are poor, while many wealthy businessmen and businesswomen are poorly educated.

Mark, probably you should be careful with Rosstat data when it comes to personal income. I don’t know their methodology, but I assume they use officially reported income only. I also assume that you are well aware that most Russians get paid “in envelopes”, i.e. their official salaries often comprise just 25-50% of what their get in cash. Another thing to conider is different social behaviour. For example, my fiance’s mom and her husband live in a small town 5 hours from Vladivostok. I guess their total recorded income is up to $ 500 considering her very low salary and his pension. But they have a house (freshly renovated), they have a car, they do travel abroad. Why? Well, first of all like many Russians they make a profit from the land they own (obviously not recorded and not taxable). Secondly, we send them money on a regular basis as it is common in Russia that children support parents and vice versa. So, are they middle class with officially reported income of $ 6,000 per household per annum? Having said that I generally agree that true middle class in Russia is much less than 50%. But I would stick to other criteria, e.g. number of total holders of foreign passports, car owners, etc.

Rosstat’s income methodology isn’t perfectly ironclad, but it does try to incorporate unofficial sources of incomes (just as their estimates of GDP try to incorporate the “grey” area of unregistered businesses).

However you’re right that we should be skeptical and not draw any super-specific conclusions from the income data. My point was that what Westerners understand as the “middle class” is still a pretty small part of Russian society and that this should color our interpretation of political and social trends.

“Middle class” in my view are those who have something to lose. Therefore, “middle class” cannot be an actual driver for any revolution or radical change irrespective of its share in total population. Although “Russian middle class” probably does not exceed 10% if you take western standards of living, I still suggest to think of it in broader terms and not Rosstat income figures which look really questionable to me. For example, about 75% of Russian households own their flats and houses (as opposed to 68% in the USA). Of course, quality of these flats is poor in many cases, but in any sizable Russian city you will really struggle to buy any flat below $ 100,000. As you can imagine the mortgage share is really small (in 2012 about 350,000 mortgage loans have been issued, while total number of households in Russia is 55 mln). There are 35 mln cars registered in Russia. Again, half of them are old and cheap Lada’s, but that probably means that at least 50% of households do have cars. About 22 mln of Russians have “foreign” passports, which means that about 20% of households do travel abroad (and I do not mean neighboring Ukraine, Belarus and Kazakhstan which we can visit with “internal” passports). About 23% of population have higher education. Would you call “middle class” those who own some property worth $ 100k (and respectively have no rental expenses), a car, who can afford travelling to other countries and have higher education (in any reasonable combination of these factors)? I would, irrespective of how Rosstat claims them to make per month. And based on that criteria we can easily reach 50% and more.

I may also recommend to check “middle class” perception against views of Russian people. According to social poll in February 2012 about 8% have reported final position of their households as “good”, 70% – as “average” (it’s “middle class”, isn’t it ?) and only 20% deemed their households to be “poor”.

By the way, I really do not see how the table correlates to average salary which Rosstat claims to be over $ 700 (and $ 1500 in Moscow) or to minimum pension of $ 300-400. I can assure you that you won’t survive for $ 156 or $ 220 in Russia. These people are either zombies or Rosstat reports only figures coming from employers who pay minimum salary to avoid payment of social taxes.

Probably Russia is getting wealthier, i.e. Russians get more dollars (not in my case), but prices grow even faster. Please take into account also that now we must pay cash for some public services, such as medicine, which were previously free. Even if you are healthy, the dentist bills can bankrupt you.

There is no individual income, property, state, sales or federal taxes to speak of in Russia, and the European standfor the property one would have to pay for the property they presently own. Russia does not use this method of calculation because to appeal to foreign investors, it prefers to present their GDP lower than it is which makes its rate of growth higher. In US, if you live in California and earn $100k, by the time you are through with all the state, property and federal taxes, health, house and car insurances and fees, you are left with pocket change. On the other hand, in Russia, you have a much better standards of living with about 20k if you own apartment and dacha which an overwhelming majority of Russians do. Besides, in my own experience, one would get a much better medical care in Russia for free than in US with the best insurance. US medical care is very inferior to most developed countries, according to WHO. One should also include Russian shadow economy in calculating GDP which is assumed to be 30% of the total and this will add additional 41% to the official figure. I would also think that adding hypothetical rent costs, which Rosstat said they will add by the end of 2012 (a pretty unlikely event), will add at least 25% to the GDP considering a skyrocketing real estate values in Russia. I think that the undervalued Russian GDP per capita should be at least $34k considering these adjustments. However, while it is difficult to understand for an average hamburger fed American, the Russian lifestyle of having two residences (apartment or a house in the city and a country house, dacha) and an ability to actually walk in a nice shady street for miles is unaccessible to most US residents. In US, all land is private and one is forced to use an automobile, creating a nation of obese people. US feels like one big jail because of this. Hence a cruel American culture of violence and low brow materialism with hardly any spirituality, an inverted totalitarism which is just about to fall.

LOL! Are you for real? Good old CCCP propaganda alive and kicking :) Unfortunately has nothing to do with authentic accounts of Russian “brain drained” scientists and professionals I talk to on regular basis.

cost of life is not lower than in us – been to russia last september – food costs same. Clothes and shoes with quality worse then wal-mart cost more than clothes and shoes u buy from bloomingdales. Electronics cost more (almost double). The best apr u can get to buy apartment or car is 20%. not too bad 1 bedroom in decent neigbourhood (city other then moscow or st. petersburg) is about $50k.so do ur math.

I have been to Russia 4 times in the last 10 years, and its is easy to see their economy is improving! My trips include traveling outside St Pete., and Moscow, which show most of the gains! But the smaller cities are also showing an improving economy! 10 years ago on my first trip to Russia, I went to several cities near the Ural mountains, and most cars were low grade Russian cars, but in recent trips you see that most people now own European, Korean, Japanese, and yes even American cars, which has forced the Russian car companies to greatly improve their products! Visiting peoples homes it seemed almost everyone had at least one Computer, and a flat screen tv! Now there are smaller cities, towns and villages that are still like they were 30 years ago, mostly because these people want it that way. Where I noticed the biggest increases is real estate, (prices for an apartment/condo have tripled in the last 10 years), and availability of credit, there are World banks like Citi Bank, Chase, etc., and credit was much easier to get! ATM’s are everywhere, as are stores that take credit cards. 10 years ago, use of credit cards were mostly limited to the major cities! Goods are everywhere, but they can be expensive, a blouse I had bought for my wife costing $20 in America was selling in a Mall store for $125! So the story isn’t totally accurate that their buying power is higher, its only higher in certain areas, and those areas are getting smaller and smaller!